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Shares in US energy companies raced higher as the price of oil rallied on the back of bullish data on crude oil inventories.

The S&P 500 energy sector, which tracks large companies in the industry, was up by almost 1 per cent in mid-morning trading in New York. Meanwhile, the small-cap focused Russell 2000 energy benchmark jumped 1.6 per cent.

Wednesday’s gains came as the price of US crude oil advanced by 1.4 per cent after a weekly reading on oil stocks. American crude inventories rose less than expected last week, while gasoline stocks, which serve as a barometer for demand, fell sharply.

Shares in oil companies have had a tough month amid mounting concern over high levels of US crude supplies. The S&P 500 energy index is still off by 1.4 per cent since the end of February, while the Russell barometer is down by 5.1 per cent over the period.